It is March 30th 2015.
India Inc. has reached the end of the first financial year to implement the CSR Rules as per the revised Company Law, Schedule VII, 2013.
And as we talk, right at this moment, some of the corporate are anxious about what to do with the pending CSR spends in the next 24hours and are resorting to quick fix solutions to make sure that the ‘compliance’ noose is off their necks.
Arguably, CSR, in most cases still remains too unfocused, too shotgun, with no real connection to the business. Perhaps this is not surprising, as trying to internalise an enforced guideline could be quite tricky for India Inc.
Considering that CSR spends need to be 2% of the net profits of the company, it can no longer be treated as a discretionary activity. And India Inc. needs to ask some tough questions – ‘Is there really competitive advantage to be had from having a CSR strategy?’ How does it help me grow my business? Is CSR an Investment, an Expense or just another stifling compliance?
Here would be my ten points to tell India Inc., and as you will notice, “Because it is in the law book” does not figure on it
- A lot of CSR strategy and programming is about working out who you are as an organisation – your values, and your soul basically, and how you can translate that back into the community
- Research shows that 1 in 3 Millennial (18-35yrs) – a predominant part of the consumers, influencers and employees for most business categories – boycott or support businesses based on the causes they care about. They tend to reward organizations and brands for involvement in social causes.
- Consumers are now increasingly giving more importance to Social benefits of a brand (not just functional or emotional benefits) and are even willing to pay a premium for “socially conscious” brands.
- As per John Mackey’s book ‘Conscious Capitalism’, businesses with a social mission perform 10.5 times to 1 over their competitors.
- CSR programs built into overall business strategy are increasingly serving as brand differentiators in a fiercely competitive and volatile market place.
- A Reputation Institute study discovered that people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perception of the company/brand & only 40% by their perception of the product/service
- In a recent survey of FTSE100 Index company website, 80% have a CSR section in the main navigation of their website, highlighting the efficiency of CSR in stakeholder engagement
- Globally, companies are discovering how CSR projects not only help them grow domestic markets but also lead their entry into difficult overseas markets.
- Truly groundbreaking CSR has the ability to change the world. TOMS shoes didn’t just make CSR a part of its business. The company was founded on the principle of philanthropy. “One for One,” the company’s motto, is reflective of its business model.
- There is a plethora of evidence to support that not doing CSR or doing ‘reactive’ or ‘remedial’ CSR, can in the long run lead to a company’s downfall.
As we race to the close of the first year of mandatory CSR in India, I would like to leave you with this
“Is NOT doing CSR bad Business?”
https://www.youtube.com/watch?v=kM4vP7tdXsk
This post has been written by:
Chandni Jafri, Founder & ED, SLSV.
For more details on her, click here.